Jack in the Box same-store sales of (2.1%)
in Q4 2024, (1.3%) for FY 2024
Del Taco same-store sales of (3.9%) in Q4
2024, (1.5%) for FY 2024
Jack in the Box and Del Taco opened 44
restaurants in FY 2024, including net positive unit growth and a
growing development pipeline for both brands
Jack in the Box opened 30 restaurant
openings in FY 2024, the highest openings since 2012, and completed
60 restaurant site approvals in FY 2024, the highest since
2010
Del Taco refranchised 47 restaurants in FY
2024, including development commitments for 42 new restaurants, and
is now nearly 80% franchised
Jack in the Box expecting to have 8
restaurants open in Chicago in calendar 2025, and will enter
Florida late in the year
Jack in the Box signed franchise development
agreement during Q1 to enter Detroit with 5 new restaurants; now
has 10 total restaurant commitments in Michigan
Jack in the Box Inc. (NASDAQ: JACK) announced financial
results for the Jack in the Box and Del Taco segments in the fourth
quarter, ended September 29, 2024.
“I am very pleased we achieved our gross opening targets for
both Jack in the Box and Del Taco in fiscal 2024, reflecting a
level of growth not seen in over a decade, and also with the
significant progress on our digital initiatives and POS rollout,”
said Darin Harris, Jack in the Box Chief Executive Officer. “We
managed well through a difficult top-line macro environment in
2024, and will continue to aggressively pursue initiatives to help
energize sales and traffic in 2025.”
Jack in the Box Performance
Same-store sales decreased 2.1% in the fourth quarter of 2024,
comprised of a decrease in company-operated same-store sales of
2.2% and a decrease in franchise same-store sales of 2.0%. Sales
performance was driven by a decrease in transactions and
unfavorable menu mix, which was partially offset by price.
Systemwide sales(1) for the fourth quarter decreased 1.7%.
Jack in the Box had 16 new restaurant openings and 20 restaurant
closures during the fourth quarter. For fiscal year 2024, Jack in
the Box opened 30 new restaurants, and was net positive 5
restaurants. As of the end of the fourth quarter, and since the
launch of the development program in mid-2021, the company has
signed 101 agreements for a total of 464 restaurants, with 51
already opened to date. During the fourth quarter, Jack in the Box
announced an agreement with a new franchisee for 12 restaurants in
the Chicago market, adding to the 8 company-owned openings planned
for calendar year 2025.
Restaurant-Level Margin(3), was 18.5% for the fourth quarter, a
decrease from 20.7% in the prior year period. The decrease was
driven by transaction declines, as well as inflationary increases
in wages, commodities and utilities, slightly offset by menu price
increases.
Franchise-Level Margin(3), was 40.4% for the fourth quarter, an
increase from 39.9% a year ago. The increase was driven by lower
information technology support costs and the benefit of franchise
lease termination income in the current year, partially offset by
lower franchise same-store sales, and lower early termination fees
compared to the prior year.
Jack in the Box Same-Store Sales:
12 Weeks Ended
52 Weeks Ended
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Company
(2.2)%
4.4%
0.0%
8.8%
Franchise
(2.0)%
3.8%
(1.5)%
7.1%
System SSS
(2.1)%
3.9%
(1.3)%
7.3%
Jack in the Box Restaurant Counts(2):
2024
2023
Company
Franchise
Total
Company
Franchise
Total
Store count at beginning of FY
142
2,044
2,186
146
2,035
2,181
New
8
22
30
2
18
20
Refranchised
—
—
—
(5
)
5
—
Closed
—
(25
)
(25
)
(1
)
(14
)
(15
)
Store count at end of Q4
150
2,041
2,191
142
2,044
2,186
Net Unit Increase/ (Decrease)
8
(3
)
5
Q4 2024 vs. Q4 2023 Unit % Decrease
5.6
%
(0.1
)%
0.2
%
Del Taco Performance
Same-store sales decreased 3.9% in the fourth quarter of 2024,
comprised of franchise same-store sales decrease of 4.2% and
company-operated same-store sales decrease of 3.0%. Sales
performance was driven by decreases in transactions and menu mix,
which was partially offset by increase in price. Systemwide
sales(1) for the fourth quarter of 2024 decreased 3.3%.
Del Taco had 2 new restaurant openings and 5 restaurant closures
during the fourth quarter. For fiscal year 2024, Del Taco opened 14
new restaurants, and was net positive 2 restaurants. Del Taco
signed 70 total restaurant commitments in fiscal year 2024, with 42
commitments directly resulting from refranchising transactions.
Restaurant-Level Margin(3), was 9.3% for the fourth quarter, a
decrease from 14.8% in the prior year period. This decrease was
primarily driven by transaction declines, as well as inflationary
increases in wages and commodities, slightly offset by menu price
increases and a change in the mix of restaurants.
Franchise-Level Margin(3), was 26.5% for the fourth quarter, a
decrease from 32.5% one year ago. The decrease was driven by higher
information technology expenses and the impact of refranchising
transactions and the related increase of the pass through rent and
marketing fees.
Del Taco Same-Store Sales:
12 Weeks Ended
52 Weeks Ended
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Company
(3.0)%
(1.4)%
(1.3)%
2.0%
Franchise
(4.2)%
(1.5)%
(1.6)%
1.4%
System
(3.9)%
(1.5)%
(1.5)%
1.7%
Del Taco Restaurant Counts:
2024
2023
Company
Franchise
Total
Company
Franchise
Total
Store count at beginning of FY
171
421
592
290
301
591
New
3
11
14
—
14
14
Acquired from franchisees
10
(10
)
—
—
—
—
Refranchised
(47
)
47
—
(111
)
111
—
Closed
(4
)
(8
)
(12
)
(8
)
(5
)
(13
)
Store count at end of Q4
133
461
594
171
421
592
Net Unit Increase/ (Decrease)
(38
)
40
2
Q4 2024 vs. Q4 2023 Restaurant %
Decrease
(22.2
)%
9.5
%
0.3
%
Company-Wide Performance
Total revenues decreased 6.2% in the fourth quarter of 2024 to
$349.3 million, as compared to $372.5 million in the prior year
fourth quarter.
SG&A expense for the fourth quarter of 2024 was $30.0
million, a decrease of $13.7 million compared to the prior year
fourth quarter, driven primarily by COLI gains in the fourth
quarter as compared to losses in the prior year quarter, as well as
lower incentive compensation and lower litigation charges.
Restaurant impairment charges for the fourth quarter of 2024
were $7.9 million, which included $5.4 million relating to Jack in
the Box restaurants, and $2.5 million relating to Del Taco
restaurants.
Adjusted EBITDA(5), was $65.5 million in the fourth quarter of
fiscal 2024 compared with $68.4 million for the prior year
quarter.
Net earnings was $21.9 million for the fourth quarter of 2024,
compared with $21.9 million for the prior year fourth quarter.
Diluted earnings per share was $1.12 for the fourth quarter of
2024 as compared with $1.08 in the prior year fourth quarter.
Operating Earnings Per Share(4) was $1.16 in the fourth quarter
compared with $1.10 in the prior year fourth quarter.
(1) Systemwide sales include company and franchised restaurant
sales. (2) The restaurant count includes 6 cloud kitchens opened
during fiscal year 2024. (3) Restaurant-Level Margin and
Franchise-Level Margin are non-GAAP measures. These non-GAAP
measures are reconciled to earnings from operations, the most
comparable GAAP measure, in the attachment to this release. See
"Reconciliation of Non-GAAP Measurements to GAAP Results." (4)
Operating Earnings Per Share represents diluted earnings per share
on a GAAP basis excluding certain amounts. See "Reconciliation of
Non-GAAP Measurements to GAAP Results." Operating earnings per
share may not add due to rounding. (5) Adjusted EBITDA represents
net earnings on a GAAP basis excluding certain amounts. See
"Reconciliation of Non-GAAP Measurements to GAAP Results."
Capital Allocation
The company repurchased 0.3 million shares of common stock in
the fourth quarter of 2024. For the full year 2024, the company
repurchased 1.1 million shares, for an aggregate cost of $70.0
million.
On November 14, 2024, the Board of Directors declared a cash
dividend of $0.44 per share, to be paid on December 30, 2024, to
shareholders of record as of the close of business on December 12,
2024. Future dividends will be subject to approval by our Board of
Directors. As of September 29, 2024, there was $180.0 million
remaining amount under share repurchase programs authorized by the
Board of Directors which does not expire.
Guidance & Outlook
The following guidance and underlying assumptions reflect the
company’s current expectations for the fiscal year ending September
28, 2025:
FY 2025 Company-wide
Guidance
- Capital Expenditures of $105-$115 million
- SG&A of $160-$170 million
- G&A, excluding selling and advertising, is expected to be
2.3-2.5% of systemwide sales
- Depreciation & Amortization of $58-$60 million
- Share Repurchases of approximately $20 million
- Adjusted/Operating EPS Tax Rate of ~27.5%
- Adjusted EBITDA of $288-$303 million
- Operating EPS of $5.05-$5.45
- Includes dilutive impact from refranchising 13 Del Taco
restaurants in Q1
FY 2025 Jack in the
Box Segment Guidance
- Same Store Sales of flat to +1% vs. FY 2024
- 35-45 gross restaurant openings
- Company-Owned Restaurant Level Margin of 20-22%
- Reflecting the impact of a full year of AB1228 wage increases,
higher utility costs, and low single digit commodity inflation
- Franchise Level Margin of 40-41%
FY 2025 Del Taco
Segment Guidance
- Same Store Sales approximately flat to -1.0% vs. FY
2024
- 15-20 gross restaurant openings
- Company-Owned Restaurant Level Margin of 9-11%
- Reflecting the impact of a full year of AB1228 wage increases,
higher utility costs, and mid single digit commodity inflation
- Franchise Level Margin of 25-26%
Conference Call
The company will host a conference call for analysts and
investors on Wednesday, November 20, 2024, beginning at 2:00 p.m.
PT (5:00 p.m. ET). The call will be webcast live via the Investors
section of the Jack in the Box company website at
http://investors.jackinthebox.com. A replay of the call will be
available through the Jack in the Box Inc. corporate website for 21
days. The call can be accessed via phone by dialing (888) 596-4144
and using ID 7573961.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), founded and headquartered
in San Diego, California, is a restaurant company that operates and
franchises Jack in the Box®, one of the nation's largest hamburger
chains with approximately 2,200 restaurants across 22 states, and
Del Taco®, the second largest Mexican-American QSR chain by units
in the U.S. with approximately 600 restaurants across 17 states.
For more information on both brands, including franchising
opportunities, visit www.jackinthebox.com and www.deltaco.com.
Category: Earnings
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements may be identified by words such as “anticipate,”
“believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,”
“intend,” “plan,” “project,” “may,” “will,” “would” and similar
expressions. These statements are based on management’s current
expectations, estimates, forecasts and projections about our
business and the industry in which we operate. These estimates and
assumptions involve known and unknown risks, uncertainties, and
other factors that are in some cases beyond our control. Factors
that may cause our actual results to differ materially from any
forward-looking statements include, but are not limited to: the
success of new products, marketing initiatives and restaurant
remodels and drive-thru enhancements; the impact of competition,
unemployment, trends in consumer spending patterns and commodity
costs; the company’s ability to achieve and manage its planned
growth, which is affected by the availability of a sufficient
number of suitable new restaurant sites, the performance of new
restaurants, risks relating to expansion into new markets and
successful franchise development; the ability to attract, train and
retain top-performing personnel, litigation risks; risks associated
with disagreements with franchisees; supply chain disruption;
food-safety incidents or negative publicity impacting the
reputation of the company's brand; increased regulatory and legal
complexities, risks associated with the amount and terms of the
securitized debt issued by certain of our wholly owned
subsidiaries; and stock market volatility. These and other factors
are discussed in the company’s annual report on Form 10-K and its
periodic reports on Form 10-Q filed with the Securities and
Exchange Commission, which are available online at
http://investors.jackinthebox.com or in hard copy upon request. The
company undertakes no obligation to update or revise any
forward-looking statement, whether as the result of new information
or otherwise.
JACK IN THE BOX INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS
(In thousands, except per
share data)
(Unaudited)
12 Weeks Ended
52 Weeks Ended
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Revenues:
Company restaurant sales
$
151,417
$
174,967
$
709,035
$
846,278
Franchise rental revenues
87,281
85,993
375,428
364,591
Franchise royalties and other
54,463
55,173
238,170
240,515
Franchise contributions for advertising
and other services
56,129
56,391
248,673
240,922
349,290
372,524
1,571,306
1,692,306
Operating costs and expenses, net:
Food and packaging
42,974
51,037
199,271
250,836
Payroll and employee benefits
53,022
57,051
238,047
274,598
Occupancy and other
32,532
35,353
139,305
163,273
Franchise occupancy expenses
57,675
55,799
245,379
229,602
Franchise support and other costs
4,374
3,705
17,281
12,328
Franchise advertising and other services
expenses
58,930
60,658
259,131
253,533
Selling, general and administrative
expenses
30,033
43,708
143,233
172,872
Depreciation and amortization
13,570
13,827
59,776
62,287
Pre-opening costs
1,264
718
3,182
1,385
Goodwill impairment
—
—
162,624
—
Other operating expense, net
8,453
5,702
24,796
10,837
Gains on the sale of company-operated
restaurants
(4,639
)
(7,675
)
(3,255
)
(17,998
)
298,188
319,883
1,488,770
1,413,553
Earnings from operations
51,102
52,641
82,536
278,753
Other pension and post-retirement
expenses, net
1,579
1,608
6,843
6,967
Interest expense, net
18,525
18,279
80,016
82,446
Earnings before income taxes
30,998
32,754
(4,323
)
189,340
Income taxes
9,056
10,857
32,372
58,514
Net earnings (loss)
$
21,942
$
21,897
$
(36,695
)
$
130,826
Net earnings (loss) per share: (1)
Basic
$
1.13
$
1.09
$
(1.87
)
$
6.35
Diluted
$
1.12
$
1.08
$
(1.87
)
$
6.30
Weighted-average shares outstanding:
Basic
19,348
20,153
19,572
20,603
Diluted
19,510
20,337
19,572
20,764
Cash dividends declared per common
share
$
0.44
$
0.44
$
1.76
$
1.76
___________________________
(1)
Earnings (loss) per share may not add due
to rounding
JACK IN THE BOX INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
(Unaudited)
September 29,
2024
October 1, 2023
ASSETS
Current assets:
Cash
$
24,745
$
157,653
Restricted cash
29,422
28,254
Accounts and other receivables, net
83,567
99,678
Inventories
3,922
3,896
Prepaid expenses
13,126
16,911
Current assets held for sale
16,493
13,925
Other current assets
10,002
5,667
Total current assets
181,277
325,984
Property and equipment, at cost:
Land
93,950
92,007
Buildings
963,699
968,221
Restaurant and other equipment
171,436
166,714
Construction in progress
49,445
31,647
1,278,530
1,258,589
Less accumulated depreciation and
amortization
(848,491
)
(846,559
)
Property and equipment, net
430,039
412,030
Other assets:
Operating lease right-of-use assets
1,410,083
1,397,555
Intangible assets, net
10,515
11,330
Trademarks
283,500
283,500
Goodwill
161,209
329,986
Other assets, net
259,006
240,707
Total other assets
2,124,313
2,263,078
$
2,735,629
$
3,001,092
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities:
Current maturities of long-term debt
$
35,880
$
29,964
Current operating lease liabilities
162,017
142,518
Accounts payable
69,494
84,960
Accrued liabilities
166,868
302,178
Total current liabilities
434,259
559,620
Long-term liabilities:
Long-term debt, net of current
maturities
1,699,433
1,724,933
Long-term operating lease liabilities, net
of current portion
1,286,415
1,265,514
Deferred tax liabilities
13,612
26,229
Other long-term liabilities
153,708
143,123
Total long-term liabilities
3,153,168
3,159,799
Stockholders’ deficit:
Preferred stock $0.01 par value,
15,000,000 shares authorized, none issued
—
—
Common stock $0.01 par value, 175,000,000
shares authorized, 82,825,851 and 82,645,814 issued,
respectively
828
826
Capital in excess of par value
533,818
520,076
Retained earnings
1,866,660
1,937,598
Accumulated other comprehensive loss
(57,475
)
(51,790
)
Treasury stock, at cost, 63,996,399 and
62,910,964 shares, respectively
(3,195,629
)
(3,125,037
)
Total stockholders’ deficit
(851,798
)
(718,327
)
$
2,735,629
$
3,001,092
JACK IN THE BOX INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
52 Weeks Ended
September 29, 2024
October 1, 2023
Cash flows from operating activities:
Net (loss) earnings
$
(36,695
)
$
130,826
Adjustments to reconcile net (loss)
earnings to net cash provided by operating activities:
Depreciation and amortization
59,776
62,287
Amortization of franchise tenant
improvement allowances and incentives
4,998
4,647
Deferred finance cost amortization
4,830
5,040
Excess tax deficiency from share-based
compensation arrangements
51
71
Deferred income taxes
(10,812
)
(11,989
)
Share-based compensation expense
13,471
11,205
Pension and postretirement expense
6,843
6,967
Gains on cash surrender value of
company-owned life insurance
(16,480
)
(7,346
)
Gains on the sale of company-operated
restaurants
(3,255
)
(17,998
)
Gains on acquisition of restaurants
(2,702
)
—
Losses (gains) on the disposition of
property and equipment, net
185
(8,171
)
Impairment charges and other
171,415
6,217
Changes in assets and liabilities,
excluding acquisitions and dispositions:
Accounts and other receivables
19,905
(4,048
)
Inventories
(25
)
1,367
Prepaid expenses and other current
assets
(297
)
(1,422
)
Operating lease right-of-use assets and
lease liabilities
22,705
2,364
Accounts payable
(15,404
)
(1,692
)
Accrued liabilities
(135,159
)
47,459
Pension and postretirement
contributions
(5,937
)
(6,241
)
Franchise tenant improvement allowance and
incentive disbursements
(2,486
)
(3,265
)
Other
(6,111
)
(1,272
)
Cash flows provided by operating
activities
68,816
215,006
Cash flows from investing activities:
Purchases of property and equipment
(115,474
)
(74,954
)
Proceeds from the sale and leaseback of
assets
1,728
3,673
Proceeds from the sale of company-operated
restaurants
19,400
85,221
Proceeds from the sale of property and
equipment
24,975
25,214
Other
—
3,065
Cash flows (used in) provided by investing
activities
(69,371
)
42,219
Cash flows from financing activities:
Borrowings on revolving credit
facilities
6,000
—
Repayments of borrowings on revolving
credit facilities
—
(50,000
)
Principal repayments on debt
(29,892
)
(30,109
)
Dividends paid on common stock
(33,972
)
(35,890
)
Proceeds from issuance of common stock
2
263
Repurchases of common stock
(70,000
)
(90,029
)
Payroll tax payments for equity award
issuances
(3,323
)
(1,593
)
Cash flows used in financing
activities
(131,185
)
(207,358
)
Net (decrease) increase in cash and
restricted cash
(131,740
)
49,867
Cash and restricted cash at beginning of
year
185,907
136,040
Cash and restricted cash at end of
year
$
54,167
$
185,907
JACK IN THE BOX INC. AND
SUBSIDIARIES SUPPLEMENTAL INFORMATION
The following table presents certain
income and expense items included in our consolidated statements of
earnings as a percentage of total revenues, unless otherwise
indicated. Percentages may not add due to rounding.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS DATA
(Unaudited)
12 Weeks Ended
52 Weeks Ended
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Revenues:
Company restaurant sales
43.3
%
47.0
%
45.1
%
50.0
%
Franchise rental revenues
25.0
%
23.1
%
23.9
%
21.5
%
Franchise royalties and other
15.6
%
14.8
%
15.2
%
14.2
%
Franchise contributions for advertising
and other services
16.1
%
15.1
%
15.8
%
14.2
%
100.0
%
100.0
%
100.0
%
100.0
%
Operating costs and expenses, net:
Food and packaging (1)
28.4
%
29.2
%
28.1
%
29.6
%
Payroll and employee benefits (1)
35.0
%
32.6
%
33.6
%
32.4
%
Occupancy and other (1)
21.5
%
20.2
%
19.6
%
19.3
%
Franchise occupancy expenses (2)
66.1
%
64.9
%
65.4
%
63.0
%
Franchise support and other costs (3)
8.0
%
6.7
%
7.3
%
5.1
%
Franchise advertising and other services
expenses (4)
105.0
%
107.6
%
104.2
%
105.2
%
Selling, general and administrative
expenses
8.6
%
11.7
%
9.1
%
10.2
%
Depreciation and amortization
3.9
%
3.7
%
3.8
%
3.7
%
Pre-opening costs
0.4
%
0.2
%
0.2
%
0.1
%
Goodwill impairment
—
%
—
%
10.3
%
—
%
Other operating expense, net
2.4
%
1.5
%
1.6
%
0.6
%
Gains on the sale of company-operated
restaurants
(1.3
)%
(2.1
)%
(0.2
)%
(1.1
)%
Earnings from operations
14.6
%
14.1
%
5.3
%
16.5
%
Income tax rate (5)
29.2
%
33.1
%
(748.9
)%
30.9
%
___________________________
(1)
As a percentage of company
restaurant sales.
(2)
As a percentage of franchise
rental revenues.
(3)
As a percentage of franchise
royalties and other.
(4)
As a percentage of franchise
contributions for advertising and other services.
(5)
As a percentage of earnings from
operations and before income taxes.
Jack in the Box systemwide sales (in thousands):
12 Weeks Ended
52 Weeks Ended
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Company-operated restaurant sales
$
95,718
$
95,297
$
427,057
$
413,748
Franchised restaurant sales (1)
899,882
917,288
3,969,200
4,005,985
Systemwide sales (1)
$
995,600
$
1,012,585
$
4,396,257
$
4,419,733
Del Taco systemwide sales (in thousands):
12 Weeks Ended
52 Weeks Ended
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Company-operated restaurant sales
$
55,699
$
79,670
$
281,978
$
432,530
Franchised restaurant sales (1)
164,243
147,808
674,804
541,913
Systemwide sales (1)
$
219,942
$
227,478
$
956,782
$
974,443
___________________________
(1)
Franchised restaurant sales
represent sales at franchised restaurants and are revenues of our
franchisees. Systemwide sales include company and franchised
restaurant sales. We do not record franchised sales as revenues;
however, our royalty revenues, marketing fees and percentage rent
revenues are calculated based on a percentage of franchised sales.
We believe franchised and systemwide restaurant sales information
is useful to investors as they have a direct effect on the
company's profitability.
JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
To supplement the consolidated financial statements, which are
presented in accordance with GAAP, the company uses the following
non-GAAP measures: Operating Earnings Per Share, Adjusted EBITDA,
Restaurant-Level Margin and Franchise-Level Margin.
Management believes that these measurements, when viewed with
the company's results of operations in accordance with GAAP and the
accompanying reconciliations in the tables below, provide useful
information about operating performance and period-over-period
changes, and provide additional information that is useful for
evaluating the operating performance of the company's core business
without regard to potential distortions.
Operating Earnings Per Share
Operating Earnings Per Share represents diluted earnings per
share on a GAAP basis excluding integration and strategic
initiatives, COLI (gains) losses, net, pension and post-retirement
benefit costs, goodwill impairment, asset impairment, gains on the
sale of company-operated restaurants, gain on acquisition of
restaurants, gains on the sale of real estate to franchisees,
excess tax shortfall from share-based compensation arrangements,
and the tax-related impacts of the above adjustments.
Operating Earnings Per Share should be considered as a
supplement to, not as a substitute for, analysis of results as
reported under U.S. GAAP or other similarly titled measures of
other companies. Management believes Operating Earnings Per Share
provides investors with a meaningful supplement of the company’s
operating performance and period-over-period changes without regard
to potential distortions.
Below is a reconciliation of Non-GAAP Adjusted Net Income to the
most directly comparable GAAP measure of net income. Also below is
a reconciliation of Non-GAAP Operating Earnings Per Share to the
most directly comparable GAAP measure, diluted earnings per
share:
12 Weeks Ended
52 Weeks Ended
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net income (loss), as reported
$
21,942
$
21,897
$
(36,695
)
$
130,826
Integration and strategic initiatives
(1)
1,019
3,753
15,631
9,112
Net COLI (gains) losses (2)
(5,101
)
1,194
(14,390
)
(5,953
)
Pension and post-retirement benefit costs
(3)
1,579
1,608
6,843
6,967
Goodwill impairment (4)
—
—
162,624
—
Restaurant impairment charges (5)
7,872
237
8,008
5,236
Gains on the sale of company-operated
restaurants
(4,639
)
(7,675
)
(3,255
)
(17,998
)
Gain on acquisition of restaurants (6)
(345
)
—
(2,702
)
—
Gains on sale of real estate to
franchisees
—
—
(1
)
(9,467
)
Excess tax shortfall from share-based
compensation arrangements
46
—
51
71
Tax impact of adjustments (7)
194
1,392
(13,457
)
10,202
Non-GAAP Adjusted Net Income
$
22,567
$
22,406
$
122,657
$
128,996
Diluted weighted-average shares
outstanding - GAAP
19,510
20,337
19,572
20,764
Diluted weighted-average shares
outstanding - non-GAAP (8)
19,510
20,337
19,774
20,764
Diluted earnings (loss) per share
$
1.12
$
1.08
$
(1.86
)
$
6.30
Integration and strategic initiatives
(1)
0.05
0.18
0.79
0.44
Net COLI (gains) losses (2)
(0.26
)
0.06
(0.73
)
(0.29
)
Pension and post-retirement benefit costs
(3)
0.08
0.08
0.35
0.34
Goodwill impairment (4)
—
—
8.22
—
Restaurant impairment charges (5)
0.40
0.01
0.40
0.25
Gains on the sale of company-operated
restaurants
(0.24
)
(0.38
)
(0.16
)
(0.87
)
Gain on acquisition of restaurants (6)
(0.02
)
—
(0.14
)
—
Gains on sale of real estate to
franchisees
—
—
0.00
(0.46
)
Excess tax shortfall from share-based
compensation arrangements
0.00
—
0.00
0.00
Tax impact of adjustments (7)
0.01
0.07
(0.68
)
0.49
Operating Earnings Per Share – non-GAAP
(9)
$
1.16
$
1.10
$
6.20
$
6.21
___________________________
(1)
Integration and strategic
initiatives reflect charges that are not part of our ongoing
operations, including consulting fees for discrete project-based
strategic initiatives that are not expected to recur in the
foreseeable future.
(2)
Net COLI (gains) losses reflect
market-based adjustments on the company-owned life insurance
policies which support our non-qualified benefit plans.
(3)
Pension and post-retirement
benefit costs are the gains and losses relating to our two legacy
defined benefit pension plans, as well as our two legacy
post-retirement plans.
(4)
Goodwill impairment charges
recognized on the Del Taco reporting unit in the third quarter of
2024.
(5)
Restaurant impairment charges
relates to impairments for property and equipment, net, and right
of use assets.
(6)
Relates to the gains on
acquisition of Del Taco restaurants in Michigan.
(7)
Tax impacts for the quarter
calculated based on the non-GAAP Operating EPS tax rate of 28.1% in
the fourth quarter of 2024 and 29.7% in the fourth quarter of 2023.
Tax impacts for the year calculated based on the non-GAAP Operating
EPS tax rate of 27.2% for the full fiscal year 2024 and 27.2% for
the full fiscal year 2023.
(8)
The non-GAAP diluted
weighted-average shares outstanding amounts include those
securities that would be dilutive in the respective period that
have a net loss for GAAP purposes, but have net income for non-GAAP
purposes.
(9)
Operating Earnings Per Share -
non-GAAP may not add due to rounding.
Adjusted EBITDA
Adjusted EBITDA represents net earnings (loss) on a GAAP basis
excluding income taxes, interest expense, net, gains on the sale of
company-operated restaurants, other operating expenses, net,
goodwill impairment, depreciation and amortization, amortization of
cloud computing costs, amortization of favorable and unfavorable
leases and subleases, net, amortization of franchise tenant
improvement allowances and incentives, COLI (gains) losses, net,
and pension and post-retirement benefit costs.
Adjusted EBITDA should be considered as a supplement to, not as
a substitute for, analysis of results as reported under U.S. GAAP
or other similarly titled measures of other companies. Management
believes Adjusted EBITDA is useful to investors to gain an
understanding of the factors and trends affecting the company's
ongoing cash earnings, from which capital investments are made and
debt is serviced.
Below is a reconciliation of non-GAAP Adjusted EBITDA to the
most directly comparable GAAP measure, net earnings (in
thousands):
12 Weeks Ended
52 Weeks Ended
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net earnings (loss) - GAAP
$
21,942
$
21,897
$
(36,695
)
$
130,826
Income taxes
9,056
10,857
32,372
58,514
Interest expense, net
18,525
18,279
80,016
82,446
Gains on the sale of company-operated
restaurants
(4,639
)
(7,675
)
(3,255
)
(17,998
)
Other operating expense, net (1)
8,453
5,702
24,796
10,837
Goodwill impairment (2)
—
—
162,624
—
Depreciation and amortization
13,570
13,827
59,776
62,287
Amortization of cloud-computing costs
(3)
822
1,178
4,487
5,004
Amortization of favorable and unfavorable
leases and subleases, net
135
198
701
1,633
Amortization of franchise tenant
improvement allowances and incentives
1,168
1,352
4,998
4,647
Net COLI (gains) losses (4)
(5,101
)
1,194
(14,390
)
(5,953
)
Pension and post-retirement benefit costs
(5)
1,579
1,608
6,843
6,967
Adjusted EBITDA – non-GAAP
$
65,510
$
68,417
$
322,273
$
339,210
___________________________
(1)
Other operating expense, net
includes: integration and strategic initiatives; costs of closed
restaurants; restaurant impairment charges; accelerated
depreciation and gains on disposition of property and equipment,
net.
(2)
Goodwill impairment charges
recognized on the Del Taco reporting unit in the third quarter of
2024.
(3)
Amortization of cloud computing
costs includes the amounts for the non-cash amortization of
capitalized implementation costs related to cloud-based software
arrangements that are included within selling, general and
administrative expenses.
(4)
Net COLI (gains) losses reflect
market-based adjustments on the company-owned life insurance
policies which support our non-qualified benefit plans.
(5)
Pension and post-retirement
benefit costs are the gains and losses relating to our two legacy
defined benefit pension plans, as well as the two legacy
post-retirement plans.
Restaurant-Level Margin
Restaurant-Level Margin is defined as company restaurant sales
less restaurant operating costs (food and packaging, labor, and
occupancy costs) and is neither required by, nor presented in
accordance with GAAP. Restaurant-Level Margin excludes revenues and
expenses of our franchise operations and certain costs, such as
selling, general, and administrative expenses, depreciation and
amortization, pre-opening costs, goodwill impairment, other
operating expenses, net, gains or losses on the sale of
company-operated restaurants, and other costs that are considered
normal operating costs. As such, Restaurant-Level Margin is not
indicative of the overall results of the company and does not
accrue directly to the benefit of shareholders because of the
exclusion of corporate-level expenses. Restaurant-Level Margin
should be considered as a supplement to, not as a substitute for,
analysis of results as reported under GAAP or other similarly
titled measures of other companies. The company is presenting
Restaurant-Level Margin because it believes that it provides a
meaningful supplement to net earnings of the company's core
business operating results, as well as a comparison to those of
other similar companies. Management utilizes Restaurant-Level
Margin as a key performance indicator to evaluate the profitability
of company-operated restaurants.
Below is a reconciliation of non-GAAP Restaurant-Level Margin to
the most directly comparable GAAP measure, earnings (loss) from
operations, for the 12-weeks ended (in thousands):
12 weeks ended September 29,
2024
Jack in the Box
Del Taco
Other (1)
Total (2)
Earnings (loss) from operations - GAAP
$
75,345
$
4,325
$
(28,568
)
$
51,102
Franchise rental revenues
(79,877
)
(7,404
)
—
(87,281
)
Franchise royalties and other
(46,677
)
(7,786
)
—
(54,463
)
Franchise contributions for advertising
and other services
(48,797
)
(7,332
)
—
(56,129
)
Franchise occupancy expenses
50,338
7,336
—
57,674
Franchise support and other costs
3,332
1,043
—
4,375
Franchise advertising and other services
expenses
50,759
8,172
—
58,931
Selling, general and administrative
expenses
8,201
7,854
13,978
30,033
Depreciation and amortization
—
—
13,570
13,570
Pre-opening costs
1,052
213
—
1,265
Goodwill impairment
—
—
—
—
Other operating expense, net
4,266
3,167
1,020
8,453
Gains on the sale of company-operated
restaurants
(258
)
(4,381
)
—
(4,639
)
Restaurant-Level Margin- Non-GAAP
$
17,684
$
5,207
$
—
$
22,891
Company restaurant sales
$
95,718
$
55,699
$
—
$
151,417
Restaurant-Level Margin % - Non-GAAP
18.5
%
9.3
%
N/A
15.1
%
12 weeks ended October 1,
2023
Jack in the Box
Del Taco
Other (1)
Total (2)
Earnings from operations - GAAP
$
80,302
$
15,676
$
(43,337
)
$
52,641
Franchise rental revenues
(81,006
)
(4,987
)
—
(85,993
)
Franchise royalties and other
(48,092
)
(7,082
)
—
(55,174
)
Franchise contributions for advertising
and other services
(48,956
)
(7,436
)
—
(56,392
)
Franchise occupancy expenses
50,877
4,922
—
55,799
Franchise support and other costs
2,986
719
—
3,705
Franchise advertising and other services
expenses
53,138
7,521
—
60,659
Selling, general and administrative
expenses
8,304
9,654
25,750
43,708
Depreciation and amortization
—
—
13,827
13,827
Pre-opening costs
684
33
—
717
Other operating expense, net
1,530
412
3,760
5,702
Gains on the sale of company-operated
restaurants
(71
)
(7,604
)
—
(7,675
)
Restaurant-Level Margin- Non-GAAP
$
19,696
$
11,828
$
—
$
31,524
Company restaurant sales
$
95,297
$
79,670
$
—
$
174,967
Restaurant-Level Margin % - Non-GAAP
20.7
%
14.8
%
N/A
18.0
%
___________________________
(1)
The "Other" category includes
shared services costs and other unallocated costs
(2)
The totals might not agree to
consolidated within the Form 10-K due to rounding
Franchise-Level Margin
Franchise-Level Margin is defined as franchise revenues less
franchise operating costs (occupancy expenses, advertising
contributions, and franchise support and other costs) and is
neither required by, nor presented in accordance with GAAP.
Franchise-Level Margin excludes revenue and expenses of our
company-operated restaurants and certain costs, such as selling,
general, and administrative expenses, depreciation and
amortization, pre-opening, goodwill impairment, other operating
expenses, net, and other costs that are considered normal operating
costs. As such, Franchise-Level Margin is not indicative of the
overall results of the company and does not accrue directly to the
benefit of shareholders because of the exclusion of corporate-level
expenses. Franchise-Level Margin should be considered as a
supplement to, not as a substitute for, analysis of results as
reported under GAAP or other similarly titled measures of other
companies. The company is presenting Franchise-Level Margin because
it believes that it provides a meaningful supplement to net
earnings of the company's core business operating results, as well
as a comparison to those of other similar companies. Management
utilizes Franchise-Level Margin as a key performance indicator to
evaluate the profitability of our franchise operations.
Below is a reconciliation of non-GAAP Franchise-Level Margin to
the most directly comparable GAAP measure, earnings from
operations, for the 12-weeks ended (in thousands):
12 weeks ended September 29,
2024
Jack in the Box
Del Taco
Other (1)
Total (2)
Earnings from operations - GAAP
$
75,345
$
4,325
$
(28,568
)
$
51,102
Company restaurant sales
(95,718
)
(55,699
)
—
(151,417
)
Food and packaging
28,964
14,009
—
42,973
Payroll and employee benefits
31,274
21,748
—
53,022
Occupancy and other
17,794
14,737
—
32,531
Selling, general and administrative
expenses
8,201
7,854
13,978
30,033
Depreciation and amortization
—
—
13,570
13,570
Pre-opening costs
1,052
213
—
1,265
Goodwill impairment
—
—
—
—
Other operating expense, net
4,266
3,167
1,020
8,453
Gains on the sale of company-operated
restaurants
(258
)
(4,381
)
—
(4,639
)
Franchise-Level Margin - Non-GAAP
$
70,920
$
5,973
$
—
$
76,893
Franchise rental revenues
$
79,877
$
7,404
$
—
$
87,281
Franchise royalties and other
46,677
7,786
—
54,463
Franchise contributions for advertising
and other services
48,797
7,332
—
56,129
Total franchise revenues
$
175,351
$
22,522
$
—
$
197,873
Franchise-Level Margin % - Non-GAAP
40.4
%
26.5
%
N/A
38.9
%
12 weeks ended October 1,
2023
Jack in the Box
Del Taco
Other (1)
Total (2)
Earnings from operations - GAAP
$
80,302
$
15,676
$
(43,337
)
$
52,641
Company restaurant sales
(95,297
)
(79,670
)
—
(174,967
)
Food and packaging
29,353
21,684
—
51,037
Payroll and employee benefits
29,427
27,624
—
57,051
Occupancy and other
16,818
18,534
—
35,352
Selling, general and administrative
expenses
8,304
9,654
25,750
43,708
Depreciation and amortization
—
—
13,827
13,827
Pre-opening costs
684
33
—
717
Other operating expense, net
1,530
412
3,760
5,702
Gains on the sale of company-operated
restaurants
(71
)
(7,604
)
—
(7,675
)
Franchise-Level Margin - Non-GAAP
$
71,050
$
6,343
$
—
$
77,393
Franchise rental revenues
$
81,006
$
4,987
$
—
$
85,993
Franchise royalties and other
48,092
7,082
—
55,174
Franchise contributions for advertising
and other services
48,956
7,436
—
56,392
Total franchise revenues
$
178,054
$
19,505
$
—
$
197,559
Franchise-Level Margin % - Non-GAAP
39.9
%
32.5
%
N/A
39.2
%
___________________________
(1)
The "Other" category includes shared services costs and other
unallocated costs
(2)
The totals might not agree to consolidated within the Form 10-K
due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241120527098/en/
Chris Brandon Vice President, Investor Relations
chris.brandon@jackinthebox.com 619.902.0269
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